A lot has happened over the past year regarding the industry effort to reduce the U.S. settlement cycle for equities, municipal and corporate bonds, and unit investment trusts from T+3 (trade date plus three days) to T+2 (trade date plus two days) as a means to reduce credit and liquidity risk. 

Recently the industry working group – which includes representation from transfer agents, among many other industry players – has announced its recommendations for successfully implementing a move to T+2. The four major requirements addressed by the working group are:

  • Trade processing: Requirements for trade processing activities including reference data setup, real time trade matching, straight-through processing, and the delivery of physical securities
  • Asset servicing: Requirements related to asset servicing functions that include ex-date and cover/protect period computations for corporate actions
  • Documentation: Requirements related to agreements and procedural documentation
  • Regulatory changes: Regulatory rule changes necessary for migration to T+2

T​he industry working group has prepared a paper with its thorough recommendations, as well as a slide presentation that provides a helpful overview. We recommend you review these documents to get the full picture of the T+2 working group’s recommendations. 

We support a reduction in the U.S. settlement cycle for securities, which will increase efficiency and bring the U.S. in line with other capital markets around the world.​​